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For many people, Chapter 11 calls to mind financial turmoil for large, publicly traded corporations that have more debts than assets—the types of companies that appear in the headlines and have millions and billions of dollars in debts and assets. While many large corporations in financial trouble turn to Chapter 11 for help, small businesses and even individual consumers are eligible to seek its protections as well.

Chapter 11 bankruptcy can be used to either reorganize or liquidate a debtor. However, it is most always associated with a reorganization. Chapter 11 is similar in many ways to individual Chapter 13 bankruptcy filings, which allows filers to restructure certain debts while getting rid of others. These result in a financial future without such heavy debt burdens.

Understanding the Difference Between Chapter 11 and Chapter 7 for Businesses

Chapter 11 is the business bankruptcy alternative for those companies wishing to remain operating while dealing with debt. This is unlike a Chapter 7 bankruptcy in which a business closes its doors and liquidates. A Chapter 11 bankruptcy allows a business to continue operations without such a heavy burden of debt payments.

Chapter 11 can help a business by:

Stopping all collections and lawsuits

Allowing the business to retain control

Improving cash flow

Reducing debt

Protecting employees

Rejecting burdensome lease agreements

Paying past due taxes

Can Individuals File Chapter 11?

Chapter 11 is also available to individuals and married couples who need to file personal bankruptcy but cannot or should not seek protection under Chapter 7 or Chapter 13. Chapter 11 is more expensive to file. However, it provides flexibility to consumer debtors not available in the other Chapters.

The benefits of Chapter 11 include:

There are no debt or income ceilings. Those who make too much money cannot file Chapter 7. Additionally, Chapter 13 is only available to those whose debts are less than certain amounts. Chapter 11 is available to any individual who can afford the repayment plan, regardless of the amount of the debt balances.

A Chapter 11 repayment plan can last up to 10 years. In a Chapter 13 bankruptcy, your repayment plan cannot last longer than five years. This is very helpful for repaying large secured debts, like mortgages and car loans, or large priority debts, such as income taxes.

The debtor remains in control over a Chapter 11 case. In Chapter 7 bankruptcy and Chapter 13 bankruptcy, the court appoints a trustee to administer the case. In a Chapter 11 case, the debtor is able to maintain control over the process with supervision from the court.

Contact Our Firm to Learn How to File Chapter 11 in Kansas City

A business cannot file any type of bankruptcy without an attorney under federal bankruptcy law. Furthermore, we do not recommend that any individual do so, particularly in a Chapter 11 case. Chapter 11 bankruptcy is a long and complicated process. Thus, having an experienced attorney is of utmost importance to making sure a Chapter 11 reorganization is done in your best interest.

The business bankruptcy lawyers at The Sader Law Firm have experience in all areas of the law necessary to conduct a successful Chapter 11. This includes business law, contract law, tax law and real estate law. Our Chapter 11 bankruptcy attorneys can help both businesses and individuals use Chapter 11 to restructure their debts. For the past 30 years, our bankruptcy law firm has made its primary focus helping hundreds of Kansas and Missouri residents get their debts under control. We can help you, too. Please speak with a lawyer today to discuss whether Chapter 11 is your best option.

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*Credit card payments will not be accepted for bankruptcy cases, unless pre-approved by The Sader Law Firm. If you have a question about a credit card payment, please call our Office Manager at 816-281-6349.

Sader Law Firm is a Debt Relief Agency. We help people file for Bankruptcy Relief under the Bankruptcy Code. The information contained on this website is not to be construed as legal advice. It is not intended to solicit or form an attorney-client relationship. We do not guarantee any result and prior results do not guarantee a similar outcome. This is an attorney advertisement and this website is for informational purposes only.